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Summary: Mortgage rates have been very low over recent months and have been on a relatively steady decline. But despite this, the confidence levels among homebuilders in Washington and across the nation has dipped as the coronavirus continues to spread.
Over the past year and a half, mortgage rates have been on a declining trend. As of the week of March 23, 2020, the rate for a 30-year fixed-rate mortgage is at 3.65%. In fact, rates have been under the 4% mark since late May 2019 and aren’t expected to climb over that threshold throughout the remainder of 2020.
With rates this low, mortgages are more affordable for homebuyers. Even a fraction of a percent lower in rates makes a huge difference in the overall expense of mortgages. Tens of thousands of dollars can be saved over the life of a loan thanks to a lower interest rate.
While these lower rates are still sparking plenty of mortgage application and refinancing activity, homebuilder confidence has slipped. That said, continued low mortgage rates are prompting more homebuyer hopefuls to be more inclined to make a home purchase in 2020, making this a potentially perfect time to buy a home.
Low mortgage rates throughout Washington State have lowered many housing payments to below monthly rent levels for comparable homes in some cases. This gives residents more incentive to buy a new home instead of renting. Other incentives like the FHA 3.5% down payment program encourage new home buyers and raise homebuilder confidence in Washington.
Due to the current coronavirus pandemic, the Housing Market Index has decreased because of the lower homebuilder confidence. The Housing Market Index reports as core of 1-100 for homebuilder confidence in the new home construction market. Index numbers over 50 signal favorable conditions and vice versa. As of March 2020, the latest reading is 72, which is down 2 points from the previous month.
Sentiment levels among homebuilders have remained in a relatively small range in the low 70s for the a few months now. Having said that, the reading is still higher than it was the same time last year when the HMI was 62 in March 2019.
The year 2019 was certainly a great year for mortgage rates, considering the fact that they have been on a downward trend throughout the past few months. At the end of 2018, rates were much higher at 4.55% for a 30-year fixed-rate mortgage, so they’re much lower now. That’s great news for homebuyers and those who plan to refinance, and 2020’s mortgage rates are even lower than where they were last year. And it’s expected that they will remain that way for the rest of the year.
According to experts, 2020’s mortgage rates will average around 3.7%, which is roughly where we are at right now. That said, rates could fluctuate throughout the year, so timing your home purchase and locking in a rate properly is important. The exact time that you lock in matters a great deal.
Considering where rates are at right now, today might be the ideal time to lock in at a favorable rate and cut out the risk of higher rates later on.
Both homebuyers and homeowners are rushing in to take advantage of today’s low interest rates, as lenders are seeing a large influx of applications for both new mortgages and refinancing. Over recent months, the spike in mortgages and refinances among buyers and homeowners is something lenders have not seen in years as economic uncertainty surrounding the coronavirus pushes rates down.
Refinancing applications peaked at their highest level in over a decade over the first week of March. Mortgage loan applications also soared, reaching their highest level in nearly 11 years, according to the Mortgage Bankers Association (MBA).
If you are a buyer looking to purchase a home or a homeowner looking to make your mortgage more affordable, you may want to consider taking advantage of today’s low rates and apply for a mortgage loan or refinance sooner rather than later.
Considering the low mortgage rates today, now may be a great time to apply for a mortgage. If you’re ready to do so, Sammamish Mortgage can help. We are a local, family-owned company based in Seattle & Bellevue, Washington. We serve the entire state, as well as the broader Pacific Northwest region that includes Idaho, Colorado, and Oregon. We offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have mortgage-related questions.